Tauber v CIR (2012) 25 NZTC 20-143 (CA)
The Court of Appeal has reiterated that the IRD’s investigative powers are wide and that the requirements for access and removal warrants will not be applied in an unduly restrictive way. The case was an appeal from an unsuccessful judicial review application which arose from am IRD “raid” on two private homes and the removal of electronic and other information from those premises. The Commissioner is required to obtain an access warrant before being permitted to enter a dwelling to exercise investigative powers. A warrant is also required (absent the taxpayer’s consent) for the removal of documents and information. Warrants of both types had been obtained.
The appeal focused on the Court’s ability to consider the full version of an IRD affidavit which had been used to support the application for warrants. The taxpayers complained that this put their positions in an unduly bad light and were unbalanced and biased. The Court considered the full affidavit ( which had only been disclosed in part) and considered that it disclosed no basis for complaint. The decision seems to accept that there may well have been errors and omissions in the affidavit but the Court held that even if these were stripped out, a case was made for the warrants to issue.
This raises a high threshold before prejudicial material contained in an affidavit will be sufficient to undermine the issue of a warrant. Essentially the Court says that if the material complained about can be edited out and the affidavit can still be seen to support the issue of warrants, then they will stand. This emphasizes the importance of carefully testing the supporting material. The extent to which it is prejudicial can only be assessed having seen the whole of the information submitted to the judicial officer who issues the warrants. That was only available at the Court of Appeal level.
Other complaints about the warrants were dismissed. Although a warrant must specify a class of persons who are to have access to a dwelling, the Court said it is sufficient for the warrant to refer to every officer authorized by the Commissioner. This is not inconsistent with the law relating to search warrants but it makes it important to be sure that every member of the IRD team accessing premises has the necessary authority.
The warrants were not too widely drawn. This repeats earlier Court of Appeal views that the law regarding general warrants (which are usually not permitted in the criminal law) is not immediately applicable in the context of tax investigations. This remains a perplexing anomaly and the reluctance of our Courts to insist on real specificity in tax access warrants contributes to an environment where tax officers behave as if there are no real limits on what they may do once in a dwelling.
That attitude means there is very real need for anyone facing the exercise of access and removal warrants to have legal representation as the events unfold. That is to be sure that any concerns about the scope and basis of the warrants is noted, that appropriate procedures are followed during any search, privilege and tax advice non disclosure rights are protected and the intrusions that are inherent in such actions are kept to a minimum that is consistent with the IRD’s warranted authority.
© G D Clews